Negotiate hard with your vendors/suppliers
An area that has had some negative comments concerning Walton and Wal-Mart (WMT) has been in relationship to their vendors. To this day some people complain that Wal-Mart asks too much of them in reference to pricing.
But Sam Walton said it clearly, and he was right: "Negotiate hard with your vendors/suppliers 'cause if you pay higher than he deserves, you are buying someone else's inefficiency!"
That's the real reason some of the vendors or potential vendors complain. If they don't know how to make the deal or pricing work, they blame Wal-Mart. The truth is that Wal-Mart has a strong hand on the pulse of their customer, and have a really good idea of what they are willing to pay.
A lot of time what happens is some vendors price their products based upon what some of their suppliers quoted them. But when Wal-Mart says it's too high, they then have ammunition to work with their suppliers to work on improving their inefficiencies. Most of the time it works.
Even huge vendors have looked at ways to improve efficiencies that will cater to Wal-Marts pricing strategy, and they are able to find ways to make it work because they in turn look for any way they can to lower the cost of producing items.
In reality this is probably one of the best things that Wal-Mart has done for business and their customers. Not only do they continue to provide great prices, but they also force partners to do everything they can to lower the cost of doing business. It's a win/win for everybody involved.
Sam Walton: 10 Rules for Building a Successful Business
Sam Walton - Retail Success Story
Sam Walton: King Of The Discounters
Sam Walton: Great From the Start
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